We highly recommend that anyone looking for a broker choose one that operates under the regulation of a major regulatory agency. While there are cases when this is not possible, the following reasons show why it is a good rule of thumb to go with a regulated broker.
- Financial Account requirements – Regulators typically require that a broker has a separate bank account for money from clients than the one they operate out of to ensure money is not misplaced or accidently spent.
- Security Requirements – Good regulatory bodies will demand that a broker uses high quality security on all their transactions to avoid issues.
- Technical Updates – In order to remain in compliance with regulatory requirements, brokers will need to keep their systems up to date with the latest technical requirements. This can help to avoid downtime and other issues.
- Monitored Financial Transactions – Regulatory agencies monitor any complaints or other issues associated with financial transactions and will require that a broker handles these issues properly.
- Evaluation of Broker – A broker won’t become licensed by a regulatory body until the agency has reviewed their practices to ensure they are in compliance with their standards.
- Periodic Reviews – In order to maintain a license with a regulatory agency, a broker must submit to periodic reviews of policies. This can help ensure the broker is always in line with industry best practices.
- Place for Complaints – In the event that you have a problem with a broker, you can file a complaint with the regulatory agency so they will look into it.
- Maintaining Best Practices – Regulated brokers tend to keep up with industry best practices better than unregulated brokers because of the requirements put upon them by the regulators.
- Customer Advocate – Having a regulatory agency looking at a broker can act as a customer advocate, constantly pushing the broker to make decisions that put customers first.
- An Extra Set of Eyes – When a broker is regulated you know that at least one industry expert has looked closely at the entire system and approved it. This ‘extra set of eyes’ on a broker can be comforting for users.
Whether you choose to use a broker that is regulated or unregulated, make sure you know what you’re getting into and choose the broker that can provide you with the best overall experiences. We have heard of many examples of people being very happy with both types of brokers. As always, our goal is to provide you with the most comprehensive set of information about a binary options broker possible, so you can make the best decision on which one to use.